Market Commentary 19/04/17

EUR/USD – Bank Traders Taking Profits

The sharp move higher which took place yesterday has not continued today, due to what I believe is the bank traders taking some profits off the buy trades they got placed before the move up occurred.

As you can see, the market did continue moving past the supply zone after we’d seen it get broken yesterday afternoon. The fact that it’s managed to move this far past it, suggests that it’s likely we’ll see it continue to move higher over the coming days. For entries long I think it’s worth watching the zone closest to the current market price I’ve marked on the image. The reason why is because this zone marks the point where the retail traders would’ve started getting long trades placed to take advantage of the move higher.

To get more buy trades placed, the banks will take profits off their trades, as they know that will cause the market to fall and will make a large number of the retail traders who went long close their trades at a loss, putting sell orders into the market which they can then use to get more of their own buy trades placed. The point where this will occur is probably somewhere where I’ve marked the area, because that’s the point where they first started going long.

USD/JPY – Moving Towards Supply Zone Again

The retracement towards the supply zone we we’re seeing take place yesterday terminated last night, as the market fell back down to the point where the swing low of the retracement formed. The market was unable to break through the swing low, and today we have seen another move higher back towards the supply zone take place.

At the moment I’m not sure if we’ll see the market move back into the supply zone later on or if we’ll see it reverse near the point where yesterday’s retracement came to an end and form a consolidation. If it reverses again and falls down to the current low, I think we’ll probably see another swing higher take place, but if it moves into the supply zone and reverses, I think it could well cause a drop through the current lows to take place. For now just keep an eye on the supply zone for entries short.

AUD/USD – Reversal Continues

Today the market has continued to fall after it ran into the supply zone back on Monday afternoon. The market is now inside the daily demand zone which caused the move up to take place initially, but I think we’ll see the market drop further into this zone before a decent sized retracement or reversal forms.

The demand zone at the bottom of the image is still the zone I recommend you use to look for entries into long trades. If the banks are simply making the market move back down so they can get long trades placed, they’ll place them inside or near the demand zone, as that’s the most recent point where the may or may not have got buy trades placed.

Finding Supply & Demand Zones That Work!

How Old Supply And Demand Zones Do Not Cause The Market To Reverse And The Reason Why ﻿Traders ﻿Mistakenly ﻿Believe They Do

Why The Time It Takes For The Market To Return To A Supply Or Demand Zone Will Determine Weather The Zone Has A High Chance Of Causing A Reversal To Take Place

The Differences Between Zones Created By Bank Traders Taking Profits And Zones Created by The Bank Traders Placing Trades

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Comments

At EURUSD the price doesn’t go into the zone you marked that you supposed retail traders started to place long trades, the price just move up after some consolidation. So the banks just place more buy trades, and the retail traders before do not have any loss?

No the point I marked is just the point where the retail traders started getting long trades placed. The majority of them would’ve had got their trades placed after the bullish large range candle with the small wick on the top formed, as that was the candle which would’ve confirmed to them the market was going to move higher. So by the time the market had fallen down to the point where I had marked the zone, their losses would’ve been much bigger than what they were once the market had fallen back to the point where they entered their trades, hence the reason they were likely to close and put sell orders into the market which the bank traders would use to get their own trades placed.